SEC’s Custody Rule in Hot Water

Last week, the U.S. Securities and Exchange Commission (SEC) found itself in quite the storm, with critics from all corners lining up to take aim. On May 8, the deadline for feedback on the SEC’s proposed custody rule arrived, and boy, did the comments flow. Andreessen Horowitz’s general counsel, Miles Jennings, called it a “misguided and transparent attempt to wage war on crypto.” Sounds dramatic, right? Well, in the world of crypto, everything’s dramatic.

Cannon Fire from the Blockchain Association

The Blockchain Association wasn’t holding back either. They argued that the proposed rule exceeded the SEC’s authority, claiming it would impede advisers from working with crypto exchanges, thereby putting investors’ assets at greater risk. As if that wasn’t enough, Representative Patrick McHenry, chair of the House Financial Services Committee, chimed in, asserting the SEC was boldly marching into territories where it had no right to tread.

Coinbase Steps into the Ring

And then there’s the ongoing tussle between the SEC and Coinbase, which had its own spotlight moment in late March. The SEC accused Coinbase of running afoul of securities laws, leading to a court complaint backed by none other than the U.S. Chamber of Commerce. They threw their full weight behind Coinbase, accusing the SEC of chaotically nailing down a hazardous landscape for crypto businesses in the country.

Who’s Supporting Coinbase?

Coinbase isn’t alone in this fight; Paradigm, the investment firm founded by a Coinbase co-founder, also joined the fray, filing an amicus brief. This document raised alarm bells about how regulatory unpredictability could effectively render digital asset trading platforms nearly obsolete. Talk about a recipe for disaster!

EMPOWR Files Against the SEC

As if the SEC needed more trouble on its plate, watchdog group Empower Oversight Whistleblowers and Research (EMPOWR) decided to file a suit against the commission. They demanded the SEC shares communications between past officials and their current or future workplaces. Why, you ask? EMPOWR alleged that these former SEC officials might have had some conflicts of interest concerning cryptocurrency matters. Names like former chair Jay Clayton and former enforcement director Marc Berger were dropped like hot potatoes!

Texas Embraces Crypto Rights

Not all news around crypto was doom and gloom. Texas legislators voted to adjust the state’s Bill of Rights to include acknowledging individuals’ rights to engage with digital currencies. Bill HJR 146, introduced by Representative Giovanni Capriglione, proclaims that folks can use any medium of exchange for transactions—a clear nod to the ever-growing world of digital assets.

Do Kwon’s Bail Saga

Over in Montenegrin courts, Terra’s founder Do Kwon is feeling a different kind of pressure. His bail terms have been approved, allowing him and CFO Han Chang-Joon to settle at home (under house arrest, mind you) instead of chilly prison conditions. They’ll each have to cough up 400,000 euros, which is about $436,000. And if they misbehave? Their bail gets thrown into a special court budget section. No pressure, right?

Sam Bankman-Fried’s Legal Tango

Meanwhile, FTX founder Sam Bankman-Fried is wading through an ocean of legal troubles, seeking dismissal of up to 10 charges in advance of his October trial. His legal team is pulling out all the stops, seeking to trim the fat off the charges, arguing that some violate international treaties that govern extradition. Let’s just say, this legal game feels like watching a suspense movie with too many plot twists.